Are you the parent of a girl child? And are you interested in securing her future financially by setting aside some money for her higher education and marriage? If your answer to both my questions is yes, then you should invest some money for your daughter in the Sukanya Samriddhi Yojana.
Now you might be wondering what’s exactly Sukanya Samriddhi Yojana (Daughter’s Prosperity Scheme). Or maybe you’ve heard about it on the radio, TV or through ads in newspapers and magazines.
Regardless, I will be discussing the various benefits of the Sukanya Samriddhi Yojana or SSY and giving you all details about the scheme in my complete guide. If you’re the parents of a daughter, continue reading because it could help secure her future.
Sukanya Samriddhi Yojana Overview
|Scheme / Yojana Name
|Sukanya Samriddhi Yojana
|Any resident Indian girl child below 18 years
|Indian government’s drive to prevent discrimination against female kids while helping their parents save money for her future.
|7.4 percent compounded per annum
Understanding Sukanya Samriddhi Yojana
The Sukanya Samriddhi Yojana (SSY) was launched on January 22, 2015 by Prime Minister Narendra Modi as part of the ‘Beti Bachao, Beti Padhao’ (Save and educate your daughter) initiative. The move is part of the Indian government’s drive to prevent discrimination against female kids while helping their parents save money for her future.
The scheme is administered by the Indian government in collaboration with India Post and Public Sector Undertaking (PSU) banks as well as some private commercial banks. SSY savings accounts can be opened across India through any of these banks or post offices that provide financial services from India Post.
Features of Sukanya Samriddhi Yojana
|The guardian or parent can operate the account until the girl child is 10 years old. After she turns 18, the account must be operated by the girl child.
|Investment in the account
|A min of Rs 500 to a max of Rs 1.5 lakh investment can be done in this account in a financial year. This investment can be made in multiples of 100.
|time period of the plan
|The deposit or investment made in this has to be done for 15 years. But, this scheme matures after 21 years.
|An SSY account is able to transferred from post office to bank and from bank to post office anywhere in India. There is no charge for account transfer. However, it is necessary to show proof of change of residence. If no proof is shown, Rs 100 will be charged.
|Deposit or Investment method
|One can invest in this account through online transfer, demand draft, cheque, or cash.
Eligibility requirements for Sukanya Samriddhi Account
- Only a parent or legal guardian can open an account of a girl child.
- The girl kid must be below the age of 10 years.
- Only one account is allowed per girl child.
- A family can open a maximum of two SSY scheme accounts.
Opening an ukanya Samriddhi Yojana Account at a Bank
To open a Sukanya Samriddhi Account, you can visit any bank or post office. Here are the steps you can follow:
- Visit your nearest bank or post office.
- Fill out the Sukanya Samriddhi Yojana application form (FORM SSA-1), which will be provided by the bank or post office.
- You can also download the form beforehand and fill it out.
- Submit the necessary documents, which include –
- Girl child’s birth certificate for whom you want to open the account.
- Identity proof of the parent/guardian such as Aadhar card, PAN card, Voter ID, etc.
- Address proof such as driving license, telephone bill, etc.
- Make your first deposit, which must be a minimum of Rs 250 and can go up to Rs 1.5 lakhs.
- After submitting all the documents, the bank will take some time to process your application.
- Once your application is verified, your SSY account will be opened, and you will receive a passbook.
Opening an SSY Account at a Post Office
- Visit your nearest post office.
- Fill out the account opening form provided by the Post Office Savings Bank.
- Attach your ID proof, address proof, and other related documents with the application form.
- Deposit the sum, which must be more than Rs 250.
- Wait for the processing of your application.
- After processing, your account will be opened, and you will be issued a passbook.
Deposits Under Sukanya Samriddhi Yojana (SSY) Scheme
You can open a Sukanya Samriddhi Yojana account in the name of your daughter with a minimum of Rs.250 deposit. The account works like a Recurring Deposit. This means, you will have to deposit Rs.250 or a higher amount every month to the SSY account.
However, the Indian government has put an upper ceiling on the amount of money that parents can deposit in an SSY account.
At the time of writing this article, during the end of 2021, parents could deposit a maximum of Rs.150,000 during the tenure of the account, which, as I explained before, is till the girl attains the age of 18 years. You cannot deposit more than Rs.150,000 in an account over a period of years.
Guardianship of the Sukanya Samriddhi Account
Usually, the mother or father of the girl child is the guardian of a Sukanya Samriddhi Yojana account. That’s because the girl would be minor and hence, not entitled to operate the account on her own till she attains the age of 18 years.
At the same time, you can also designate another person, such as a relative, to be a guardian of the account.
The money from the SSY account, however, can be withdrawn only by the girl child when she attains adulthood at the age of 18 years. In case the girl child passes away, becomes an NRI, or there’re other strong reasons, the legal guardian of the child can claim the funds deposited in the SSY account.
Documents You Need to Open Sukanya Samriddhi Yojana Account (KYC) Formalities
- The Sukanya Samriddhi Yojana account opening form.
- The birth certificate of the girl child is necessary at the time of account opening.
- The depositor’s identity proof and address proof must also be submitted during the account opening process.
- If more than one child is born at the same time, a medical certificate may also be required.
- Additionally, the bank or post office may request additional documents to be submitted.
Sukanya Samriddhi Yojana offers a fixed interest rate set by the government, which is reviewed every quarter. The interest rate for 2023 is 7.6% per annum.
Interest & Taxes on (Sukanya Samriddhi Yojana) SSY Accounts
An SSY Recurring Deposit account fetches an interest at 7.4 percent compounded per annum. This is much higher than the regular Recurring Deposit rates that’s offered by banks and India Post.
Part of the interest on the SSY account is borne by the Central government. This means your girlchild stands to gain a lot of money if you save more money in her name for her marriage or higher education.
All deposits and interest are exempt from Income Tax under Section 10 of the Income Tax laws of India, according to various sources. This means your daughter will not be liable to pay any taxes when she withdraws the money after the SSY account matures at the age of 18.
Depositing Money in Sukanya Samriddi Yojana Accounts
The government of India, through banks, is offering different ways to deposit money every month in the Sukanya Samriddi Yojana Recurring Deposit accounts.
- You can deposit the money by direct debit standing instructions to your main Savings Bank or Current account or Salary Account.
- It is also possible to deposit the money by check to an SSY Recurring Deposit account at the bank. However, this facility might not be available at some post offices.
- You can credit cash directly to an SSY Recurring Deposit account.
You can use any of these three ways to credit funds to your daughter’s SSY account. Generally, the first option of direct debit through standing instructions is the best since it would help avoid queues at banks to deposit the money. This facility isn’t available at post offices, though.
Key Points on Sukanya Samriddhi Account Scheme
- After total of 21 years from the date of opening account matures or when the girl child gets married after the age of 18 years.
- A premature withdrawal of up to 50% of the investment amount is allowed after the girl child reaches the age of 18, even if she is not getting married.
- The investment duration is 21 years.
- The minimum investment amount is Rs. 1,000 per annum, and the maximum investment amount is Rs. 1.5 lakh per annum.
- On maturity of the account, the principal amount, along with the interest earned, is paid to the girl child on submitting an application along with proof of citizenship, residency, and identity.
The SSY account is expected to help lower income and middle-income families to help save money for their girl child’s future needs such as higher education and marriage.
Several million accounts have been opened by parents under the SSY scheme after it was announced. The first week after the scheme was announced in 2015 saw over 1.5 million accounts being opened across India.
This shows that the SSY scheme has been well received by Indians and more and more parents are now actively investing money for the future of their girl child.